Brazil Stocks Plunge as Another Political Crisis Unfolds

Reports of fresh political corruption crushed asset values in Brazil and cost the country’s 16 richest people $6.2 billion Thursday, according to the Bloomberg Billionaires Index. Stocks, bonds and the real fell sharply after O Globo newspaper reported on leaked testimony that President Michel Temer had approved hush money for Eduardo Cunha, the mastermind behind the impeachment of former president Dilma Rousseff.

The country’s Ibovespa Index tumbled 8.8 percent and the real dropped the most since 2008. The fall cut the year-to-date gains for the 16 billionaires to 10.6 percent from a high of 15.8 percent Tuesday. Despite the crisis, Temer said in a televised address at the presidential palace in Brasilia that he will not resign.

Banking billionaire Joseph Safra, founder of Banco Safra, had the largest drop, giving up more than $1 billion. Jorge Lemann, Brazil’s richest person and one of three billionaire partners behind private-equity firm 3G Capital, dropped $930 million. Together the billionaires behind 3G, which controls the world’s largest beermaker Anheuser-Busch InBev NV, lost a combined $1.8 billion.

Bloomberg

FTSE Eyes Higher Open as Sterling Tumbles

Gold Dips as US Posts Strong Inflation, Manufacturing Reports

USD/CAD Canadian Dollar Higher in Tense Global Political Climate

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Craig Erlam

Craig Erlam

Senior Currency Analyst at OANDA
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the Wall Street Journal and The Telegraph, and he also appears regularly as a guest commentator on networks including Sky News, Bloomberg, CNBC and BBC. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.